Enterprise and AI3 Propose Two New Tax Incentives for Impact Investing

Enterprise and the Accelerating Impact Investing Initiative (AI3) released a new paper, Encouraging Community Investments through CDFIs: Proposals for a New Federal Tax Incentive, that outlines two proposals for encouraging impact investments. Impact investments provide both a social return – such as small business expansion, job creation, or the development of affordable homes – and a financial return. Currently, however, impact investments are typically taxed at the same rate as investments that provide only a financial return, which can inhibit investments in these critical financial products. Enterprise and AI3 describe two proposals to increase impact investments: a tax exemption on income earned through the investment; and a tax credit worth a percentage of the investment. Learn more about the paper in Enterprise’s blog post.